#1LANTRONIX TM CONNECT SMART. DO MORE™M Investor Presentation January 2021 Copyright © Lantronix 2020. All rights reserved.#2FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements, including statements concerning our business and product development plans and strategies, the perceived benefits of our products and corporate acquisitions, and our future growth and financial performance. Any statement relating to our plans, goals, expectations or any future event should be considered a forward-looking statement. While we have based our forward-looking statements on our current assumptions and expectations, forward-looking statements are not guarantee of future performance and are subject to substantial risks and uncertainties. As a result, our actual results could differ materially from those indicated in our forward-looking statements, and you should not rely on any of these forward- looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include the impact of the COVID-19 pandemic; volatility in global economic conditions; product development and marketing risks; risks related to manufacturing and international operations; difficulties associated with our suppliers, distributors or resellers; intense competition in our industry; changes in applicable U.S. and foreign government laws, regulations, and tariffs; risks associated with acquisitions, divestitures, mergers, or joint ventures; intellectual property and cybersecurity risks; the outcome of legal proceedings; and other risks and uncertainties described in "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, as well as in our other filings with the SEC. In addition, new risks emerge from time-to-time and we cannot predict all future risks or assess the impact of all risks to our business. Our forward-looking statements are based on our view as of the date they are made. Except as required by law, we expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof because of new information, future events or otherwise. This presentation references certain non-GAAP financial measures, including non-GAAP net income (loss). A reconciliation of the non-GAAP financial measures to the corresponding GAAP financial measures, along with important information regarding our disclosure of the non-GAAP financials, is provided in Appendix A. LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE 2#3OUR VISION TO PROVIDE TURNKEY CUSTOMER SOLUTIONS FOR lloT AND REMOTE ENVIRONMENT MANAGEMENT Lantronix aims to be the go-to industry loT and REM partner, providing full stack turnkey solutions comprised of SaaS products and features, Professional Services, and Hardware. Customers get a "one stop shop" experience enabled by ease of purchase, activation, deployment, and management, leaving them to focus on their core products and business. LANTRONIX 3#4SECURE TURNKEY SOLUTIONS FOR THE INDUSTRIAL IOT loT • مه lloT and SaaS Market Growth Opportunity Global provider of secure turnkey management solutions for lloT Connectivity products and SaaS services which are easy to deploy and manage, and accelerate customer time to market Growing Market opportunity with billions of devices connected worldwide* Strong Blue-Chip customer base Partnerships with top SOC manufacturers** Significant financial momentum and operating leverage Growth and Improvement in Operating Model Strong Global Revenue Base Experienced Leadership Team LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE 4#5Paul Pickle CEO Microsemi David Goren PROVEN LEADERSHIP TEAM Jeremy Whitaker CFO NEX Jon Shipman VP, Strategy twitch ▶ YouTube ebay VP, Business Affairs & HR Microsemi LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE MNDSPEED EY Robert Adams Head of BD & Investor Relations Microsemi Fathi Hakam VP, Engineering KYOCERA NIM NETWORKS IN MOTION Roger Holliday VP, WW Sales Microsemi Michael A. Fink VP, Operations Inphi MNDSPEED SIERRA 5#6FAVORABLE SECULAR TRENDS (+ Monitoring and Management Energy & Distributed Utilities Healthcare & Remote Patient Monitoring Commercial Applications IoT Smart Cities Building Infrastructure Integration Rise of Robotics Automation in Industrial Manufacturing and Logistics Edge Compute, Computer Vision & AI Big Data Store and Sort, Predictive Analytics Increased Government & Defense Spending for the Internet of Military Things LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE#7OUR GROWTH STRATEGY Targeted Acquisitions Expand Lantronix hardware and software offerings and technical capabilities; reduce time to market Organic HW Offer innovative hardware solutions across value oriented and premium product families LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE Organic SW Offering turnkey customer solutions through Software as a Service products, built to leverage our innovative hardware#8lOT APPROACH SIMPLIFIED 1. Identify Customer Need 2. Full Stack Approach LANTRONIX H Control EU Comprehend 3. Turnkey Solutions Market Application Vertically Aligned Business Operations Analytics, Insights, Predictions Compute Connect Infrastructure Monitoring & Management Collect#9Robotics Video Conferencing CUSTOMER USE CASES Augmented Reality TANGEN rapid more Medical (SEDP) OOO Commercial loT door 8#10OPERATING RESULTS LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE 10#11SELECTED INCOME STATEMENT INFORMATION (In thousands) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 FY18 FY19 FY20 Net Revenue $ 12,741 $ 13,228 $ 16,512 $ 17,397 $ 17,146 $ 45,580 $ 46,890 $ 59,878 Gross Profit $ 6,195 $ 6,777 $ 7,377 $ 6,551 $ 8,239 $ 25,406 $26,273 $26,900 % of Net Revenue 48.6% 51.2% 44.7% 37.7% 48.1% 55.7% 56.0% 44.9% GAAP Net Income (Loss) $ (2,470) $ (1,351) $ (5,216) $ (1,701) $ (302) $ 680 $ (408) $ (10,738) Non-GAAP Net Income (Loss) $ 7 $ 666 $ 611 $ 1,191 $1,654 $2,935 $3,690 $2,476 * Refer to Appendix for reconciliation of Non-GAAP financial measures LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE FY 2020 HIGHLIGHTS " " 28% revenue growth Change in gross profit as percentage of net revenue primarily due to product mix from acquisitions Non-GAAP opex as a percent of revenue down from 49% in FY19 to 42% in FY20 11#12LANTRONIX COMPANY CONFIDENTIAL. DO NOT DISTRIBUTE LANTRONIX CONNECT SMART. DO MORE™M [email protected] 26#13LANTRONIX APPENDIX A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (In thousands) GAAP Net Income (Loss) Non-GAAP Adjustments: Share-based Compensation Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 FY19 FY20 $ (2,470) $ (1,351) $ (5,216) $ (1,701) $ (302) $ (408) $ (10,738) 578 938 1,132 990 603 1,871 3,639 Withholding Taxes on Stock Grants Depreciation and Amortization 10 2 7 14 11 12 33 147 156 269 275 265 464 847 Severance and Restructuring Costs Acquisition Related Costs Impairment of Long-Lived Asset 749 354 2,263 478 92 1,146 3,844 643 353 1,250 38 410 2,284 275 Amortization of Purchased Intangible Assets 144 151 801 941 882 2,037 Amortization of Manufacturing Profit in Acquired Inventory 171 33 51 7 255 Litigation Settlement Cost 75 75 Interest Expense (Income), Net (56) 16 83 90 85 (236) 133 Other (Income) Expense, Net 43 10 (129) (1) (39) 15 (77) Provision (Benefit) for Income Taxes 48 37 43 16 50 141 144 2,477 2,017 5,827 2,892 1,956 4,098 13,214 $ 7 $ 666 $ 611 $ 1.191 $ 1,654 $ 3,690 $2.476 Total Non-GAAP Adjustments Non-GAAP Net Income (Loss) Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The Company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Management believes that non-GAAP net income (loss) is an important measure of the Company's business. Management uses this financial measure to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. COMPANY CONFIDENTIAL. 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